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Solid price pressure on gold, silver amid strong dollar, bearish technicals

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(Kitco News) - Gold and silver prices are solidly lower in early U.S. trading Friday. Gold hit a five-month low and silver a two-year low overnight. The metals are feeling the pressure of a stronger U.S. dollar index that is back near its recent 20-year high and from near-term charts that have turned significantly more bearish this week. That’s inviting the technically based speculators to play the short sides of the gold and silver futures markets. August gold futures were last down $20.30 at $1,787.00. July Comex silver futures were last down $0.872 at $19.41 an ounce.

Global stock markets were mostly lower overnight. U.S. stock indexes are pointed toward lower openings when the New York day session begins, on this first trading day of the month and of the second half of 2022. Potential U.S. and/or global economic recessions are on the front burner of the marketplace at present, and that’s bearish for equities. The major central banks have signaled to the marketplace that tamping down inflation is more important than keeping economies growing. “We can see the foundations are being set for recession,” said one market participant in a Dow Jones Newswires story. The Russia-Ukraine war also remains a significant drag on trader and investor risk sentiment.

In overnight news, the Euro zone reported its consumer inflation in June rose to a record high of 8.6%, year-on-year. That compares to a rise of 8.1% in May and expectations for a June rise of 8.4%on the year.

The key outside markets today see Nymex crude oil prices higher and trading around $108.80 a barrel. The U.S. dollar index is solidly higher in early U.S. trading. The yield on the 10-year U.S. Treasury note is fetching 2.954%.

PMI round-up: Good news in China

U.S. economic data due for release Friday includes the U.S. manufacturing purchasing managers index (PMI), the ISM report on business manufacturing, the global manufacturing PMI, construction spending and domestic auto industry sales.

Live 24 hours gold chart [Kitco Inc.]

Technically, the August gold futures bears have the solid overall near-term technical advantage as prices hit a five-month low overnight. Bulls’ next upside price objective is to produce a close above solid resistance at $1,850.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,750.00. First resistance is seen at $1,800.00 and then at today’s high of $1,808.70. First support is seen at $1,775.00 and then at $1,765.00. Wyckoff's Market Rating: 2.0.

Live 24 hours silver chart [ Kitco Inc. ]

July silver futures bears have the solid overall near-term technical advantage as prices are at a two-year low. Silver bulls' next upside price objective is closing prices above solid technical resistance at $21.00 an ounce. The next downside price objective for the bears is closing prices below solid support at $19.00. First resistance is seen at $20.00 and then at the overnight high of $20.185. Next support is seen at $19.25 and then at $19.00. Wyckoff's Market Rating: 1.0.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.